Plains Cotton v. Goodpasture Computer
Citation Plains Cotton Co-op v. Goodpasture Computer Serv., Inc., 807 F.2d 1256, 1262 (5th Cir. 1987) (full-text). Factual Background The plaintiff, an agricultural cooperative, had developed computer software called the "Telcot system." The Telcot system operated on a mainframe computer and, through telecommunications, permitted cooperative members to obtain regularly updated displays of information pertaining to cotton prices and availability as well as accounting and order processing. The individual defendants had worked on the development of the Telcot system for plaintiff but "none of these employees was required to sign confidentiality agreements as a condition of his employment with Plains."807 F.2d at 1258. The individual defendants thereafter left Plains and went to work for a company called CXS. Plains and CXS had previously entered an agreement whereby CXS was licensed to create a personal computer version of the Telcot system with both parties becoming joint owners of the resulting work. When the individual defendants left to join CXS, Plains sought to terminate the licensing arrangement. Thereafter, CXS became insolvent and filed for bankruptcy. While CXS was bankrupt, Plains and CXS reached an agreement regarding termination and regarding Plains' option to purchase all rights in the software that had been created up to that time. Plains did not exercise this option. The corporate defendant, Goodpasture, thereafter hired the individual defendants and put them to work on the personal computer version of the Telcot system. Just twenty days after arriving at Goodpasture, the former Plains employees had completed a design of the personal computer version of the Telcot system and just several months later, Goodpasture began marketing it under the name "GEMS." District Court Proceedings The district court found that the four former Plains employees had access to the Telcot system, that one of them had brought a diskette containing Telcot system programming design information to Goodpasture, and that at least one Telcot subroutine had been copied into and as part of the programming for GEMS. Nevertheless, the district court refused to enter a preliminary injunction because of its finding that the underlying program code for the two programs had not been copied (with the exception of the one subroutine which was replaced as of the date of the preliminary injunction hearing). Appellate Court Proceedings The Appellate Court affirmed and in doing so, made clear that it was not prepared to embrace a broad scope of protection for software copyrights: In a footnote further explaining the phrase "externalities of the cotton market" which "play a significant role in determining the sequence and organization of cotton marketing software," the Fifth Circuit Court states: The Fifth Circuit thus concluded that Plains Cotton had failed to demonstrate that the district court's factual findings were clearly erroneous or that its findings of law were incorrect. This decision was the first officially reported post-''Whelan'' appellate decision to not find or affirm an infringement based on less than a literal copying of underlying program code. While finding that defendant's program was "very similar to Telcot on the functional specification, programming and documentation levels," the court refused to follow Whelan and instead held, that at that early stage of the litigation where no adjudication had yet occurred, the structure, sequence, and organization of the plaintiff's program was not necessarily expression but could, as a factual matter, be found after trial to constitute an unprotectable "idea."Id. at 1262. Thus, the court concluded that whether structure, sequence, or organization of a computer program is protected expression or unprotectable idea must be determined factually on a case-by-case basis by looking at the computer program in the context of the particular industry in which it is employed and whether that industry of necessity demands that the visual displays of such programs be organized in a certain manner because of the custom and practice in the particular industry in which the computer program is designed to operate. References Category:Copyright Category:Software Category:Case Category:Case-U.S.-Federal Category:Case-U.S.-Copyright Category:1987